Michigan soybean industry reacts to China's tariff announcement

GRAND RAPIDS, MI -- Reaction was mixed Wednesday among Michigan's soybean growers and processors after the Chinese government added their product to a list of U.S. exports that will get a 25 percent tariff.

Michigan farmers raise nearly 2 million acres of soybeans a year, making it the nation's 12th largest producing state. More than half of all U.S. soybeans are exported and 60 percent of those exports are shipped to China.

American soybean farmers lost more than $1.7 billion in value to their crop during morning trading in U.S. commodities markets after the tariffs were announced, according to Ernie Birchmeier, manager of the Center for Commodity Farm and Industry Relations and the Livestock and Dairy Specialist for Michigan Farm Bureau.

China is the second largest export market for American farmers, importing $13.9 billion of U.S. soybeans in 017, said Birchmeier, adding the tariff news could not come at a worse time for the struggling farm economy.

Meanwhile, the state's leading soybean processor was more sanguine.

Cliff Meeuwsen, president of Zeeland Farm Services, said he doesn't have any immediate concerns because the Chinese government has not set a date for the tariffs to begin.

"In my opinion, it is a negotiation tactic to bring people to the bargaining table," said Meeuwsen.

"U.S. soybean farmers have seen prices decline by almost 40 percent over the past five or six years and any news that could potentially drive prices down even further is unsettling. But, as I understand it, there is no effective date set for the tariffs yet, so I don't have any immediate concerns," said Meeuwsen in a statement on Wednesday, April 4.

"The market is going to react, and it did. It's like anything else, the markets all react to the first news. They usually overreact and then come back to reality when it comes down to the discussion phase."

As someone who voted for President Donald Trump, Meeuwsen said he's sympathetic to the president's efforts to restore America's industrial base by imposing tariffs on Chinese steel.

"I can't believe how over the years we've signed agreements that basically gave a lot of our heavier industries away to competing countries," Meeuwsen said.

The Michigan Soybean Association urged leaders from both countries to return to the negotiating table and resolve their differences without escalating the current trade dispute.

"We are already in a deeply uncertain time in the agricultural economy, and soybean farmers are extremely concerned that the escalating conflict between the U.S. and China will cause further damage," said Dave Williams, president of the Michigan Soybean Association.

"The tariffs announced by China will lead to real money lost for farmers that they won't be able to reinvest in their farms or spend at local equipment dealers, restaurants or movie theaters in rural communities throughout the nation. This situation is entirely preventable and must be resolved," Williams said.

The Michigan Farm Bureau's Birchmeier said other parts of the state's agricultural industry also could suffer if the Trump Administration continues to target China with additional tariffs and trade restrictions.

"Overreaction is the worst possible reaction at this time," Birchmeier said. "Certainly, the ag industry is very concerned about the potential impact of these trade disputes."

"We need to continue to communicate our message to our elected officials, the administration and especially the United States Trade Representatives," he said.

"We expect all countries to trade fairly, and we support enforcement of all trade rules. But we also hope trade disputes can be resolved without harming an industry that is a bright spot on trade and is so important to rural America."